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{
    "id": 700655,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/700655/?format=api",
    "text_counter": 167,
    "type": "other",
    "speaker_name": "",
    "speaker_title": "",
    "speaker": null,
    "content": "2016, farmers received their payments without delay. Just this week, the KTDA had released the biggest pay out of Kshs44.72 billion to farmers. These payments have been made inspite of those deposits being locked in the commercial banks. The statement says that the KTDA has been able to achieve this through borrowing and re-allocation of funds from other projects. The worry is that if you borrow to pay bonus, then it means that you ultimately reduce profitability and the bonuses will be affected. It is not a desirable position to use borrowings to pay farmers. There has been a question on why the KTDA would get into investments of this kind yet it is a farmers’ organization. It is the responsibility of the KTDA to maintain custody of sale proceeds from tea. When the money is received, the most prudent way of managing it is to keep it in a deposit where it can earn interest. From the statement, we have indicated that the KTDA has earned close to Kshs600 million in interest from their deposits in those banks. Who takes responsibility? Mr. Temporary Speaker, Sir, the KTDA has a board that has got farmers representatives. On the question of whether farmers were consulted, the assumption is that their representatives would provide adequate representation of the views and sentiments of farmers. However, if any one should take responsibility, it would be the board because it is the one that approves the banks and sets the investment policy and advises management on how and where to put the funds. The Central Bank of Kenya (CBK) cannot also escape blame because they are the ones responsible for regulation and providing prudential governance of the banking sector. It was difficult for the KTDA to know that Imperial or Chase bank was going to collapse since they relied on the balance sheet, profitability and the report that came from the CBK. There was a query by Sen. Obure on the issues of low prices on tea. There are many reasons that this is attributed to, but take note that the KTDA has indicated that this year’s revenue of Kshs84 billion is the highest compared to the prior year which was Kshs63.5 billion. There has been an increase of 32.2 per cent in revenue that has been attributed to better price per kilo, good climate and a favourable forex regime. However, there are still cartels, for example, the East Africa Tea Trade auction which operates like a cartel. There are brokers in Mombasa who operate like an ethnic hegemony. It is extremely difficult to break into that. Therefore, farmers will not get the best prices irrespective of how good the rainfall or exchange rate is as long there are these cartels and capacity at the East Africa Tea Trade auction. I hope that covers the questions that were raised."
}